Financial collapse, systemic crisis ?
Illusory answers and necessary answers
by Samir Amin
Paper introducing the World Forum of Alternatives, in Caracas, october 2008
The financial crisis could not be avoided
The violent explosion of this crisis did not surprise us; I mentionned
it a few months ago while the conventional economists were ignoring its
coming development and consequences, especially in Europe. In order to
understand it we must get rid of the conventional definition of the
system which qualifies it as “neo-liberal” and “global”. This definition
is superficial and masks the essential. The current capitalist system is
dominated by a handful of oligopolies that control the basic decisions
making of the world economy. These oligopolies are not solely financial;
such as the banks or the insurance companies, but include enterprises
involved in industrial production, services, transports and the like.
The way they are financiarized is their chief characteristic. We must
understand here that the main source of economical decision has been
transferred from the production of surplus value in production towards
the redistribution of profits between the oligopolies. To that effect
the system needs the expansion of financial investments. In that respect
the major market, the one which dominates all other markets, is
precisely the monetary and financial market. This is my definition of
the "financiarization" of the global system. Such a strategy is not the
result of independent "decisions" of banks, it is rather that the choice
of the “financiarized” groups. These oligopolies hence do not produce
profits; they just swipe the monopolies’rent through financial investments.
This system is extremely profitable for dominating sectors of the
capital. Thus, the system should not be qualified "market economy"
(which is an empty ideological qualification) but as a capitalism of
financiarized oligopolies. However, financial investment could not
continue indefinitely, while the productive basis was growing at a low
rate. Consequently, we have the logic of a “financial bubble”, the sheer
translation of the financial investments system. The gross amount of
financial transactions reaches two thousands trillions alone, while the
world GDP is 44 thousands trillions only. Quite a huge multiple! Thirty
years ago, the relative volume of such transactions did not have this
extent. As a matter of fact, those transactions were directed in general
and expressly to cover the operations linked to production, and internal
and external trade. The overall outlook of this financed oligopolies
system was – as I said previously- the Achilles’ heel of that capitalist
structure. The crisis was doomed to be initiated by a financial collapse.
Behind the financial crisis, the systemic crisis of the aging capitalism
To attract the attention on the financial collapse is not enough. Behind
it, a crisis of real economy is standing out, since the financial drift
was continuously asphyxiating the growth of the production basis.
Solutions brought to the financial crisis can just lead to a crisis of
the real economy, i.e. a relative stagnation of the production with its
side effects: regression of wages, growth of unemployment, growing
precariousness and aggravation of poverty in the Southern countries. We
must speak now about depression and no more about recession.
Behind this crisis, the systemic crisis of capitalism is looming right
after. The pursuit of the model based on the growth of the real economy
–as we know it- and of the consumption attached to it, has become, for
the first time in history a real threat for the future of humankind and
the planet.
The major caracter of this systemic crisis is related to the natural
resources of the planet, now less abundant than half a century ago. The
North-South conflict constitutes for that reason the central axis of
coming struggles and conflicts.
The production and consumption-waste system at the moment forbids the
access to the world natural resources for the majority of the planet,
i.e. the peoples of the South. Previously, an emergent country could
take its share of these resources without questioning the privileges of
the affluent countries. But today, it is no more the case. The
population of opulent countries -15% of the planet’s population- has to
monopolize for its own consumption and waste 85% of the world resources,
and cannot tolerate that newcomers may reach these resources, since they
would provoke shortages for rich people’s standard of living.
If the USA has formulated an objective of military control of the
planet, it is because, without it, they cannot secure the exclusive
access to these resources. As we know: China, India and the South as a
whole need them as well for their development. For the USA, they must
limit the access and ultimately, there is only one mean: war.
On the other hand, to preserve energy sources of fossil origin, USA,
Europe and others develop production of bio-fuel projects to a large
scale, to the detriment of food production, still accusing the rise of
prices.
Illusory answers of the governing powers
Governing powers, under the rule of financial oligopolies, do not have
any other project except to restore the same system. However, their
success is not impossible, if they can inject enough liquidities to
restore the credibility of the financial investments, and if the
reactions of the victims –working classes and nations of the South-
remain limited. But, in this case, the system steps back to better jump
and a new financial collapse, still deeper, is unavoidable, since the
“adjustments” for the management of financial and monetary markets are
not wide enough, because they do not question the power of oligopolies.
Furthermore, answering the financial crisis by injecting phenomenal
public funds to re-establish the security of the financial markets is
amusing: first, profits were privatized, if they are jeopardized, the
losses are socialised! Reverse, I win, head, you loose.
Conditions for a genuine positive answer to the challenges
To say that the State’s interventions may change the rules of the game,
lessen the drifts, is not enough. We must define the logics of that
intervention and its social purpose. Of course, we could come back in
theory to the formulas associating public and private sectors, to a mix
economy as it existed during the glorious thirties in Europe and at the
time of Bandoung in Asia and in Africa, when State capitalism was
largely dominant, accompanied by strong social policies. But this kind
of State intervention is not on the agenda. Also, are the progressive
social forces able to impose such a transformation? Not yet to my
viewpoint.
The other choice is the toppling of the oligopolies’ exclusive powers,
unthinkable without, finally, their nationalisation leading
progressively to the socialisation of their management. End of
capitalism? I do not think so. Yet, I submit that changes in classes'
relations are possible, imposing adjustment to the capital, in answer to
the demands of working classes and peoples. The conditions for such an
evolution to occur imply the progress of social struggles, still
fragmented and on the defensive position altogether, moving towards a
political coherent alternative. In that perspective, the long transition
from capitalism to socialism becomes possible. The advances in this
direction are obviously always uneven from one country to the other and
from one phase to the other.
The dimensions of this desirable and possible alternative are numerous
and concern all aspects of economical social and political life. I will
recall here the general lines of this necessary answer:
(i) The re invention by the working people of adequate organizations
allowing the construction of their unity, bypassing the fragmentation
due to the forms of exploitation (unemployment, precariousness and
“informal”).
(ii) The awakening of theory and practice for democracy associated to
social progress and respect of people’s sovereignty, not dissociated
from them.
(iii) The emancipation from the liberal virus based on the myth that the
"individual" has already become the subject of history. Frequent rejects
of ways of living associated to capitalism (multiple alienations,
patriarchal relations, consumerism and destruction of the planet) signal
the possibility of this emancipation.
(iv) To get rid of atlantism (NATO) and militarism, associated to it,
aiming at the organization of the planet on the basis of apartheid on
the world scale.
In the countries of the North, the challenge is to avoid that the
general opinion adopts a consensus in support of privileges unacceptable
by the peoples of the South. The necessary internationalism goes through
anti imperialism and not the “humanitarian”.
In the countries of the South, the strategy of the world oligopolies is
to transfer the weight of the crisis on these peoples (devaluation of
money reserves, fall of the export raw resources prices and rise of
import ones). In counterpoint the crisis presents the opportunity for
the renewal of national, popular, democratic alliance of working
classes, and on that basis the move from a pattern of capitalist
dependent development with growing exclusion of majorities towards an
alternative pattern of inclusive development, in other words
"delinking". This involves:
(i) The national control of monetary and financial market (moving away
from the integrated global monetary and financial "market").
(ii) The control of modern technologies, accessible now (defeating the
exclusive monopoly of the North, overprotected by WTO rules on
industrial property).
(iii) The recuperation of the use of natural resources.
(iv) The defeating of global management, dominated by the oligopolies
(WTO) and the military control of the planet by the USA and their allies.
(v) The liberation from the illusions of an autonomous national
capitalism system as well as of passeist myths (para religious or para
etnic).
(vi) The agrarian question lies in the heart of decisive choices in
Third world countries. An inclusive pattern of development needs an
agrarian radical reform, that is a political strategy based on the
access to the soil for all peasants (half of humankind). On the
opposite, the solutions proposed by the dominant powers –to accelerate
the privatization of arable soil, and its transformation into
merchandise- lead to massive rural disintegration. The industrial
development of the concerned countries being not able to absorb this
overabundant manpower, this one crowds together in shantytowns or risks
its life trying to escape in dugouts via the Atlantic Ocean. There is a
direct link between the suppression of access to the soil and the
migratory pressures.
(vii) Can regional integration, while encouraging the emergence of new
development poles, constitute a resistance and an alternative?
Regionalisation is necessary, maybe not for giants such as China, India
or even Brazil, but certainly for many other regions in South-East Asia,
in Africa or Latin America. Venezuela has rightly chosen to create ALBA
(Bolivarian Alternative for Latin America and the Caribbean’s) and the
Bank of the South (BANCOSUR), long before the crisis. But ALBA –an
economical and political integration project- has not yet received the
support of Brazil or even Argentina. However, BANCOSUR, whose aim is to
promote another development, gathers these two countries, even though
they still have a conventional conception about the role of this bank.
Progresses in this or that direction, North and South, the basis of
workers and peoples internationalism, constitute the only guarantees for
the reconstruction of a better, multipolar democratic world, the only
alternative to the barbarism of the aging capitalism. More than ever,
the struggle for the 21st century socialism is on the agenda.
Translated from French by Daniel Paquet for Investig'Action
Revised by Samir Amin
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Received on Sun Nov 23 02:46:48 2008
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